1. PPP Loan Forgiveness Help Center
  2. Forgiveness Application Questions

What documentation are borrowers who are individuals with self-employment income who file a Form 1040, Schedule C or F required to submit to their lender with their request for loan forgiveness?

If you're using Form 3508S: For borrowers that received loans of $150,000 or less that use the SBA Form 3508S, the borrower must submit the certification and information required by section 7A(l)(1)(A) of the Small Business Act and, for a Second Draw PPP Loan, revenue reduction documentation if such documentation was not provided at the time of application. Borrowers do not need to submit documentation of payroll or nonpayroll costs.

If you're using Form 3508EZ or 3508: All other borrowers must submit the certification required by section 7A(e)(3) of the Small Business Act, and (if the borrower has employees) Form 941 and state quarterly business and individual employee wage reporting and unemployment insurance tax forms or equivalent payroll processor records that best correspond to the covered period (with evidence of any retirement and group health, life, disability, vision, and dental insurance contributions).

Whether or not the borrower has employees, the borrower must submit evidence of business rent, business mortgage interest payments on real or personal property, business utility payments, or payments for a covered operations expenditure, covered property damage cost, covered supplier cost, or covered worker protection expenditure during the covered period if the borrower used loan proceeds for those purposes.

This documentation may include cancelled checks, payment receipts, transcripts of accounts, purchase orders, orders, invoices, or other documents verifying payments on nonpayroll costs. For all loans, the 2019 or 2020 Form 1040 Schedule C or F that the borrower provided at the time of the PPP loan application must be used to determine the amount of net profit allocated to the owner for the covered period.

We understand that as a sole proprietor you may not always have well documented payroll expenses because the money was used to pay yourself. We can accept the following documents to prove payroll in your forgiveness application:

  • Bank statements, where it shows disbursed amounts to your personal account
  • Pictures of checks that you made out to yourself
  • If you don’t have a business account, proof of the original PPP loan funds being disbursed into your bank account is enough to prove payment as a sole proprietor

Note: Our team is dedicated to making the application process as simple for you as possible; however it is important to note that this is intended to be used for informational purposes only and does not constitute as legal, business, or tax advice. Please consult your attorney, business advisor, or tax advisor with respect to matters referenced in our content.